Set out at Appendix A to the report were full details of the progress on the Capital Programme as at 30th September 2013.

The following adjustments had been requested to the Capital Programme 2013/14 in respect of the following:

Director of Learning and Skills

· Oakfield New Entrance and Reception Area - Carry forward £146,000 of funding for Oakfield new entrance and reception area to 2014/15.

Director of Social Services

· Flying Start Grants - Following approval from Welsh Government additional funding had been made available to Flying Start in 2013/14, a provisional budget of £413,000 had been included in the Capital Programme and it was now requested to increase this by £131,520. The revised budget £544,520 would cover the following schemes:

- Ladybirds provision at Holton School £193,250, £20,000 for equipment was already built into the Capital Programme for 2013/14

- £40,000 to fund a Parenting Suite at Holm View this would consist of a crÃ¨che, a room for group working as part of the parenting classes and also a preparation room

- Funding of £122,364 for the Flying Start Family Centre; this would fund a Parenting Room at the Gladstone Road site

- Funding £168,906 for Co-location project at Skomer Road office

- Rondel House Boiler Replacement virement of £40,000 from Hen Goleg Boiler Replacement and Heating Works to Rondel House Boiler Replacement to ensure that the scheme was progressed in 2013/14.

Director of Visible Services and Housing

· Flood Risk Management – £750,000 was approved as part of the 2013/14 Capital Programme for various schemes to address flooding and drainage issues

· Cross Common Road Bridge – the Capital Programme increased by £650,000 to address the outcome of a feasibility study which was considering options for the future of Cross Common Road Bridge, this would be funded from a revenue contribution

· Housing Improvement Programme – Increase the Housing Revenue Account Capital Programme by £600,000 to fund work to be carried out on void properties

· Welsh Housing Quality Standard (WHQS) works for Sheltered Housing £150,000 should be brought forward from the Capital Programme in 2014/15 to progress WHQS works for sheltered housing.

Director of Development Services

· S106 / Belle Vue Park – Cabinet had been requested to include £10,000 in the Capital Programme for Section 106 funding awarded to the project.

· WHQS works for sheltered housing – Funding of £150k brought forward from the Capital Programme in 2014/15.

Cabinet had previously agreed that further information would be provided where schemes have a value of over £500,000 and showed a variance of 20% or more between actual spend and the profile. The following schemes met this criteria –

· WHQS Works – As outlined in previous capital monitoring reports there was always likely to be a variance in the WHQS expenditure as the extent of works required in a property was not known until the works commenced. During September, works on central heating / boilers and roofing works were behind profile, whilst asbestos management costs had exceeded the initial profile.

· Learning in Digital (Wales) Grant – A large order £470,000 was placed during September which would rectify the discrepancy between the profile and actual expenditure and ensure the grant was fully spent by the grant deadline in December 2013.

· Ysgol Nant Talwg, Barry – The variance between actuals to date at the end of September and profiled budget was due to a delay in issuing a certificate of payment. All required information was now in place and a payment was made in October which brought the actuals to date in line with the profiled expenditure.

· Vehicles Renewal Fund – Expenditure was slightly behind profile due to second hand vehicles being purchased in year and some items of expenditure being delayed pending the outcome of decisions regarding future revenue services.

The Welsh Government (WG) had announced the provisional 2014/15 General Capital Funding on 16th October 2013. The 2014/15 capital settlement represented a £246,000 (4.7%) increase in funding over the previous year’s allocation; however because this amount included the reinstatement of £280,000 transferred to supported borrowing for the Housing Revenue Account in 2013/14, the actual position for the Council was a reduction of £34,000 which represents a 0.61% cut. The indicative amount provided by WG suggested that capital funding will be maintained at this level for 2015/16. This has been reflected in the proposed Capital Programme 2014/15 to 2018/19.

Whilst the indicative amounts have been utilised in 2014/15 and 2015/16, for the purposes of this programme, the assumption of a 10% cut each year had been assumed in 2016/17, 2017/18 and 2018/19. In line with the financial strategy, the Council would mitigate the deteriorating situation by looking to progress only those schemes which were deemed to be a key corporate priority, whilst also seeking to gain assurance that such schemes were delivered on time and within budget.

Cabinet, on 13th February 2008, approved that the Director of Resources in consultation with the Cabinet Member responsible for Finance, be given delegated authority to transfer supported borrowing between General Fund and the Housing Capital budgets as appropriate. Due to the uncertainty regarding the future of Housing Subsidy, the Authority did not intend to seek a £280,000 transfer in each year of the Capital Programme as had been previously assumed; unsupported borrowing in the Housing Revenue Account has been increased accordingly.

The Major Repairs Allowance (MRA), which was a grant that provided capital funding to the Housing Revenue Account (HRA) for 2014/15, had not been announced by the WG. Cabinet would be advised once the announcement was made. However, an assumption had been made which was set out in Appendix B to the report that the grant would continue at the current allocation of £2.8m in 2014/15.

In addition to funding from the WG, the Council would finance part of the Capital Programme from its own resources, e.g. Capital Receipts and Reserves. Set out in Appendix B was the proposed 2014/15. The following table of information set out details of the General Capital Funding and internal resources required to fund the proposed schemes.

Capital bids were invited for return by 30th September 2013 and the number of bids received was reduced from the high volume in the previous year. This reduction reflects that the Capital Programme had been set to 2017/18 following the budget review that took place as part of the 2013/14 budget process. Departments were requested to rank their own bids in order of importance before submission, and bids from each Department were forwarded to the Corporate Asset Management Group (CAMG) for evaluation.

The Budget Working Group had prioritised bids based upon the recommendations of the CAMG (and were shown in Appendix B) who had used the criteria set out by the Budget Strategy and met the risk assessment which had been undertaken in line with the Council’s Corporate Risk Management Strategy which was also set out in the report. Only those schemes assessed as corporate priority 1 or medium risk and above were included. Bids which did not meet this criteria and therefore excluded from the Capital Programme were detailed in Appendix C to the report.

In addition to bids meeting the criteria for inclusion in the Capital Programme, there had been a number of changes approved by Cabinet since the final budget proposals in February 2013 that impacted on the Capital Programme, such as, amendments to the budgets carried forward and these changes were included. Also reflected in Appendix B were proposed changes to the Housing Revenue Account Business Plan.

As in the case of the consideration of the Initial Revenue Budget Proposals, similar arrangements were in place for the Scrutiny Committees to pass their comments to the Scrutiny Committee (Corporate Resources) who would, on behalf of all the Council’s Scrutiny Committees, formally respond to Cabinet by no later than 13th December 2013. However, Scrutiny Committees were being asked to first consider the indicative Capital Proposals as set out in Appendix B. If a change to the initial proposals was desired, the Scrutiny Committee was required to provide a reason for this need in order to assist the Cabinet and the CBWG in their deliberation when drawing up the final proposals. The total net capital expenditure of the proposed programme for the whole of the Council over the five years was approximately £102m.

Managers would be asked to revisit the schemes listed in Appendix B and to confirm final cost and spend profiles prior to the final proposals being considered by Cabinet by no later than 24th February, 2014. Cabinet’s final Capital Programme proposals would be considered by Council no later than 5th March, 2013.

If the schemes proposed for the whole of the Council were approved, the effects on General Fund useable capital receipts were as follows:

General Fund Capital Receipts

£'000

Anticipated Balance as at 1st April 2014

7,940

Anticipated Requirements – 2014/15

(2,656)

Anticipated Receipts – 2014/15

885

Balance as at 31st March 2015

6,169

Anticipated Requirements – 2015/16

0

Anticipated Receipts – 2015/16

0

Balance as at 31st March 2016

6,169

Anticipated Requirements – 2016/17

(2,237)

Anticipated Receipts – 2016/17

0

Balance as at 31st March 2017

3,932

Anticipated Requirements – 2017/18

(0)

Anticipated Receipts – 2017/18

0

Balance as at 31st March 2018

3,932

Anticipated Requirements – 2018/19

(0)

Anticipated Receipts – 2018/19

0

Balance as at 31st March 2019

3,932

In line with the overall strategy and specific suggestions proposed by the Budget Working Group (BWG), in order to resource the Capital Programme, reserves will be utilised over the period of the Capital Programme 2014/15 to 2018/19.

The Project Fund would be used to fund schemes assessed on an invest to save basis, and in certain circumstances business critical schemes may also be funded from this reserve with the prior approval of the Director of Resources. A balance of £2m would be retained as a balance on this fund. The projected usage of this reserve, for the whole of the Council, over the period of the Capital Programme was shown below:

Project Fund

£'000

Anticipated Balance as at 1st April 2014

4,217

Anticipated Requirements – 2014/15

(1,754)

Anticipated Receipts – 2014/15

402

Balance as at 31st March 2015

2,865

Anticipated Requirements – 2015/16

(450)

Anticipated Receipts – 2015/16

100

Balance as at 31st March 2016

2,515

Anticipated Requirements – 2016/17

(400)

Anticipated Receipts – 2016/17

60

Balance as at 31st March 2017

2,175

Anticipated Requirements – 2017/18

(100)

Anticipated Receipts – 2017/18

60

Balance as at 31st March 2018

2,135

Anticipated Requirements – 2018/19

(0)

Anticipated Receipts – 2018/19

0

Balance as at 31st March 2019

2,135

The above forecast balances needed to be seen in the context of significant pressures for spending which were not yet included in the Capital Programme. These pressures included the backlog of school, highways and buildings improvements.

RECOMMENDED -

(1) T H A T the Initial Capital Budget Proposals for 2014/15 be endorsed and that Cabinet be informed of the Scrutiny Committee’s deliberations on the matter.

(2) T H A T the following changes to the 2013/14 Capital Programme be noted:

· Increase the provisional Flying Start capital budget by £131,520, following approval by Welsh Government of additional funds, the amended budget of £544,520 will cover the following schemes Ladybirds at Holton School, Parenting Suite at Holm View, Flying Start Co-location and Flying Start Family Centre

· Increase the Capital Programme by £650,000 for a scheme at Cross Common Road Bridge to be funded from a revenue contribution

· Increase the Housing Revenue Account Capital Programme to reflect a £600,000 contribution from revenue to fund works with void properties

· Include a £10,000 budget for S106 works at Belle Vue Park in the Capital Programme

· Carry forward £146,000 for Oakfield School new entrance and reception area, to 2014/15 when the funding will be used as part of the 21st Century Schools funded proposals for Ysgol Gwaun y Nant and Oakfield Primary School

Reason for recommendations

(1) To inform Cabinet of the outcome of the scrutiny process on the matter.